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U.S. Bets Billions on GM's Resurgence

General Motors, the car maker known for its iconic Buick, Cadillac and Chevrolet models, filed for Chapter 11 bankruptcy protection on June 1, 2009.

Steven Rattner, chief of the administration's autos task force, said the government played no role in choosing which plants to close and sought to quell concerns that it will make decisions better left to the company. "No plant decisions. No job decisions. No colors-of-car decisions," he said.

The administration also will dispatch eight Cabinet secretaries and other top officials to Ohio, Michigan, Indiana and Wisconsin this week to "discuss immediate ways the federal government is cutting through red tape to bring relief to auto communities and achieve long term economic revitalization," according to a White House statement.

All four states are considered presidential swing states, and the White House emissaries plan to discuss the administration's efforts to restructure the auto industry and to implement the $787 billion economic stimulus plan.

Addressing the workers directly, Obama said there would be pain ahead but added that their sacrifices will ensure the future of the manufacturing base so that "all of our children can grow up in an America that still makes things, that still builds cars, that still strives for a better future."

Despite the complaints, the administration was buoyed yesterday by the news that a federal bankruptcy court had approved plans to create a new Chrysler run by Fiat, free of much of its debt and other crippling obligations.

"Keep in mind, many experts said that a quick, surgical bankruptcy was impossible. They were wrong," Obama said yesterday.

In its new Fiat alliance, Chrysler will expand its footprint with Fiat's Latin American and European distribution networks. Its gas-guzzling product line will add Fiat's smaller, more fuel-efficient vehicles.

But the global auto industry, analysts noted, is littered with failed joint ventures and mergers -- BMW and Rover, Fiat and GM, Ford and Jaguar and Land Rover, to name a few. Closer to home, Chrysler just finished extricating itself from another ill-fated union, with Daimler.

One of the main reasons for the trouble, auto executives and analysts said, is the clash of management between distinct corporate cultures.

Gerald C. Meyers, former chief executive of American Motors Corp., said he searched for a global partner 30 years ago in much the same way Chrysler had sought out Fiat. He found a willing partner in Renault, a French automaker.

"It was supposed to be a marriage made in heaven -- that's the same term that was used to describe DaimlerChrysler," Meyers said in a recent interview. "But they had no feeling for the heredity of the Jeep. People want to buy them and go off road with them and go fish, and the French had no idea what that was about, and they didn't care."

Renault eventually sold AMC to Chrysler.

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